Monday, November 5, 2007

Kenyan Insurance for California fires?

The marshalling of resources to fight the California bush fires and the massive evacuation operations was truly an educative demonstration in disaster management. It may not surprise anyone that no one from our myriad local ‘disaster management’ outfits took a flight to the US for close-up practical lessons. They most likely gathered crucial skills from the comfort of their sitting rooms or local pubs or wherever the CNN footage was beamed across the world. Do we have foresighted technocrats in the fire fighting departments, police, military, St. John’s, Red Cross et al, with the capacity to set up exchange/training programs with the battle hardened organizations out there? Or shall we remain content with sending appeals out there for assistance whenever disaster strikes our lands?

One of the most striking announcements during the California disaster was that insurance companies were already setting up desks at the evacuation centers to begin processing the victims’ compensation for home rebuilding! And I thought, haai, we are truly living in the third world. Insurance companies re-building razed houses? Thousands of them?

It reminded me of a household cover I took a while back with a local insurance company. When my cell-phone (also covered) was snatched from me by robbers right at my door in an enclosed compound the company refused to compensate. That is when the notorious fine lines were fished out from some policy document I’d never been shown before. That they only compensated phones damaged accidentally, like if it fell on the floor to pieces…in the house. Proving that would of course require an investigation report from their appointed detective - skilled enough to differentiate between an accidentally dropped phone from one carelessly tossed about. Well, they refused to pay and I bought a cheaper gadget the following week and life went on.

What will happen when my house burns down? Before even their clever detectives are called in, some insurance agent in a tie (even in the Mombasa heat) will have reminded you of the fine-print exclusion clauses. Arson, riot act, natural calamity, God’s act, electrical fault….. Do this people compensate anyone for anything? Except when they rush to the media to display cheques in payment for a matatu smash up.

They may well argue that tenants cannot be compensated for razed rental houses, but do they compensate the owner? If not, why not? If so, why not adjust premium payments to include the tenant’s exposure to the potential calamity? Surely this cannot be beyond actuarial mathematics.

And then this years salary survey places Insurance company executives among the top five most highly paid professionals in the country!

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